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- Title
On discounted dynamic programming with unbounded returns.
- Authors
Matkowski, Janusz; Nowak, Andrzej
- Abstract
In this paper, we apply the idea of k-local contraction of Rincón-Zapatero and Rodriguez-Palmero (Econometrica 71:1519-1555, 2003; Econ Theory 33:381-391, 2007) to study discounted stochastic dynamic programming models with unbounded returns. Our main results concern the existence of a unique solution to the Bellman equation and are applied to the theory of stochastic optimal growth. Also a discussion of some subtle issues concerning k-local and global contractions is included.
- Subjects
DYNAMIC programming; STOCHASTIC analysis; ECONOMETRICS; ECONOMIC development; FUNCTIONAL analysis; EQUATIONS
- Publication
Economic Theory, 2011, Vol 46, Issue 3, p455
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-010-0522-5